What I didn't understand, back in the day, was why the Horde were sold as He-Man figures, but were the villains in the She-Ra show. Shouldn't they be She-Ra figures? I've wondered about this for a long time.

The kids would be tempted to watch the Princess of Power cartoon if it was sold as a spin-off character of He-Man.

Since there wasn't a MotU show anymore, the Horde villains were recycled as She-Ra villains instead.

If you compare the toys, you'll notice that the Princess of Power dolls are not exactly the same size that the MotU figures. It is especially obvious when Teela is compared to any of the Princess of Power female figures.

You'll also notice that the settings of the She-Ra cartoon are much darker than the packaging of the She-Ra dolls.

Also, She-Ra had one villain from the start : Catra.
In the toyline, she isn't Horde member and she is the archenemy of She-Ra.

So, I think that Mattel, after creating the Princess of Power toyline, decided to turn it into a spin-off of He-Man when they made the packaging. That's why the Princess of Power was named She-Ra.

Then, they agreed with the cartoon producers to make a She-Ra cartoon with the Horde as the main villains.

Thus, He-Man fans would continue to buy the Horde figures and they could watch the villains on the She-Ra cartoon.